Apple moves to acquire Shazam, prompting E.U. investigation

Jason Reed/The Daily Dot

The popular app may be used to improve Apple Music.

Apple confirmed today its acquisition of Shazam, a service that identifies songs, TV shows, movies, and ads by listening to short audio clips. The acquisition was first reported by TechCrunch last Friday and confirmed on Monday in a statement to BuzzFeed.

“We are thrilled that Shazam and its talented team will be joining Apple,” an Apple spokesperson said. “Apple Music and Shazam are a natural fit, sharing a passion for music discovery and delivering great music experiences to our users. We have exciting plans in store, and we look forward to combining with Shazam upon approval of today’s agreement.”

Shazam also released a statement, touting its impressive user base.

“We are excited to announce that Shazam has entered into an agreement to become part of Apple,” a spokesperson said in a statement to the Verge. “Shazam is one of the highest rated apps in the world and loved by hundreds of millions of users and we can’t imagine a better home for Shazam to enable us to continue innovating and delivering magic for our users.”

The vague press releases leave a number of questions unanswered. Namely, what Apple will do with the tools and nearly two decades of data it acquires with the app. It’s likely the Cupertino giant will use the information it gains from Shazam to beef up the Apple Music platform, which has fallen far behind Spotify in recent years. The company already has Shazam’s sound recognition built-in to Siri, so it’s also possible we might see further integration meant to improve the iPhone’s ability to recognize voices and song.

Shazam passed one billion app downloads in September 2016 but has struggled to remain profitable over the last few years. Terms of the deal weren’t disclosed, but the app is reportedly valued at $400 million, far less than its $1 billion estimated worth in 2015. One of Shazam’s revenue streams comes from referrals to other services. Once Shazam tells a user what song they’re listening to, it gives them the option to view and purchase it from Apple Music and Spotify. These services gain a combined one million clicks per day from Shazam, according to the Verge. Apple could theoretically oust Spotify by redirecting all users to its own Music app. It could even shut down Shazam altogether and force iPhone owners to use Siri.

We also wouldn’t be surprised if Apple uses Shazam for augmented reality (AR). Apple CEO Tim Cook is bullish about AR, the process of enhancing the real world by superimposing digital images and sounds onto the environment. With the AR platform Shazam launched earlier this year, Apple could create a Google Lens-like app that can identify and provide information on objects in real-time. Note, these are all theoretical next steps, Apple has not yet confirmed its plans.

The acquisition, if approved, will close in the coming weeks.

We have reached out to both companies to learn more and will update this article if we hear back.

Update 7:28am, April 24: The European Union has launched an investigation into Apple’s acquisition of Shazam over data concerns. The E.U. is worried Shazam will use the information it gathers on customers who use competing services, like Spotify, to unfairly encourage their users to switch. Additionally, an update where Shazam only refers people to Apple Music could have a major impact on other streaming services. Antitrust experts fear this could hinder competition in an already cutthroat market.

“Our investigation aims to ensure that music fans will continue to enjoy attractive music streaming offers and won’t face less choice as a result of this proposed merger,” E.U. competition commissioner Margrethe Vestager said in a statement.

The E.U. has until Sept. 4 to determine whether it will block the deal or request concessions from Apple.

Phillip Tracy

Phillip Tracy

Phillip Tracy is a former technology staff writer at the Daily Dot. He's an expert on smartphones, social media trends, and gadgets. He previously reported on IoT and telecom for RCR Wireless News and contributed to NewBay Media magazine. He now writes for Laptop magazine.